Learning from failure: The implications of product recalls for firm innovation

• DOI: 10.1111/jscm.12306
• Publication Date: 2023-06-07T07:44:44Z
• Authors: John Ni; Alexander Borisov; Sachin Modi; Xiaowen Huang
• Keywords: Product innovation

Abstract Existing research provides contrasting perspectives on the implications of product recalls for firms. While some studies find that represent failures can motivate firms to innovate, others suggest resource‐intensive nature may inhibit from innovating. This study presents a theoretical framework reconciles these two by proposing an inverted U‐shaped relationship between firm's recall frequency and innovation output. The paper also evaluates effect growth potential frequency–innovation relationship. Analysis data vehicle recall‐related patents in automotive sector 1980 2019 confirms shows is steepened firm. Overall, more nuanced understanding learning bridges supply chain disruption literature context recall.